Putnam v. Sweet

| Wis. | Jun 15, 1849

Lead Opinion

Stow C. J.

The bill in this case was filed by the complainants (about twenty in number) for themselves, and all others alleged to be bona fide stockholders of the Milwaukee and Janesville Plank Eoad Company, claiming to hold one thousand shares of the stock, against the defendants, charging certain of them with a combined fraudulent subscription of seven thousand and seven hundred shares, and others of them with a combined fraudulent antagonistic subscription of seven thousand five hundred shares; a fraudulent suing out and abuse of an injunction from the Milwaukee circuit court, (in which the bill was originally filed), by Blossom, in confederacy with the defendants, Sweet, Davis, Hibbard, Webb and Williams, by which the commissioners appointed by the act of incorporation were restrained from distributing the stock and organizing the company; and that through the instrumentality of that fraudulent process and proceeding, the defendants, Sweet, Webb, Gh'eeves, Davis, Taylor, Hibbard and Chandler, have possessed themselves of the books and papers of the commissioners (who, until after the election of directors, were, by the act, to be officers of the corporation), and assume to act as the directors and officers of the company.The bill states that the commissioners, obeying the mandate of Blossom’s fraudulent injunction, have ceased the exercise of their office, and that the complainants and their fellows are the only bona fide stockholders of the company; and prays that the alleged fraudulent subscriptions be set aside and declared void; that the pretended organization of the company, by means of the fraudulent use of Blossom’s injunction, be declared void ; that the defendants, assuming to act in the name of the corporation, be restrained from prosecuting certain suits for the collection of the subscriptions, etc.; and that the commissioners be declared, for the time being, the officers of the company, and be reinstated in the possession of its boobs and effects; and for general relief The defendants, Sweet, Davis, Webb, Hibbard, Blossom, Williams, Ciarle, Green and Taylor, demurred, and assigned as causes of demurrer : 1. That the bill is multifarious. 2. Want of jurisdiction in the circuit court. 3. That the corporation should have been made a party. 4. That the complainants have not a right to prosecute for themselves and fellows.

The circuit court overruled the demurrer as to multifariousness, and sustained it as to the other causes, and dismissed the bill. To reverse this decree the complainants have appealed to this court.

I shall consider the questions arising in the case in the order in which they are presented by the demurrer. Rut, before doing so, I will dispose of an objection which has been made ore terms, which is, that there is no equity in the bill.

It has been contended on the part of the defendants, that the bill discloses a corrupt agreement between the complainants and the commissioners, to get control of the company by means of a trifling subscription, and to use it for the purpose of private speculation to the injury of the public. I can by no means say tibat the bill shows the complainants to have acted from public spirit, or in a manner particularly commendable. But, on the other hand, I do not think it shows any such fraudulent agreement or purpose, as to exclude them from a cornt of equity. Private speculation was, doubtless, with most of them the leading motive ; and the direction of the company was probably regarded as an important element of success. But there was not anything necessarily, or by fair implication, illegal in this, and to close the doors of equity against the complainants for this reason would be in effect to shut out from the court of chancery most stockholders of incorporated companies.

The first cause of demurrer is multifariousness. The bill sets up a general right on the part of the complainants and them fellows against all the defendants, and charges that all the defendants, except the commisioners, claim on fraudulent subscriptions, or by means of Blossom1 s fraudulent injunction ; and that the commissioners have abandoned their duty to the bona, fide subscribers, in obedience to that injunction. Though the transactions of the several defendants are various, and some, of them not necessarily connected, they are all charged (with the exception of the subscriptions of WeeJes, Wells, Lud-ington and Kneetcind) to be the work of one concerted confederacy, and the result of one common scheme to defraud the complainants. The subscription of Weeks and Ms associates, is alleged to be fraudulent, and to have been made in antagonism to the fraudulent subscriptions of Bbssom and his confederates, and as it respects the complainants, for the same purpose as theirs — the defrauding the bona fide stockholders. The objection now under consideration has been mainly urged on the grounds that the subscription of Wells and Ms associates, so far from having been made in concert, with those of Blossom and his associates, is shown by the bill to have been made in hostility to it, and that, therefore, no common liar bility on the part of the two adverse sets of fraudulent subscribers exists. That there was no community between these different and adverse defendants, as it regards themselves, is very clear; but it by no means follows that there is not such a privity in relation to the complainants, that the wrong which they have perpetrated for the same purpose, at the same time, and by the same means, in connection with, though in hostility to one another, may not be redressed by the same proceeding. If two are engaged in the same felony, though they may be hostile to each other, each seeking for himself the sole advantage, they are privies as it regards the crime, and may be prosecuted jointly. Looking at the whole of these transactions, as stated in the bill, and admitted by the demurrer, I am of opinion that there was such a connected, though not confederated fraud, on the part of the defendants as subscribers, that they are properly joined as defendants. It is further contended, that the defendants Greves and Taylor, not being parties to the original confederacy, and having no connection therewith, ought not to be made defendants, and cannot be required to answer. The bill shows these parties to have come in by means of the operation of the fraudulent injunction, and if so, they are answerable with the original confederates thereto; and besides, the bill specially charges them with combining with Blossom and his associates ; and as these have not denied, by answer, this charge, they cannot ■ avail themselves of this ground of demurrer.

2. "Want of jurisdiction.

in support of this objection, the defendants contend that the bill shows a corporation in existence, and that certain of the defendants are its officers defacto; and that being so, they cannot be removed at the suit of private individuals, but must be proceeded against by the government. In the view 1 take of this branch of the case, it is entirely immaterial whether the corporation is now in actual existence or not. The bill states that, for the purpose .of defrauding the complainants and preventing the commissioners from distributing the stock and organizing the company by an election of directors, Blossom, in confederacy with his associates, Sweet, Davis, Hib-bard, Webb and. Williams, filed a bill, which was false in all its material allegations, against the commissioners, and thereon obtained an injunction restraining them from distributing the stock and holding the election of directors; that the service of the injunction was delayed until the confederates had, by a trick, possessed themselves of then’ certificates, when, in pursuance of a preconcerted signal, it was served; that the commissioners thereupon abandoned their trust; and that, thereupon, the defendants, Blossom avid his associates, possessed themselves of the books, etc., and claim to act as the directors and officers of the company; that the confederates having effected their purpose, Blossom discontinued his suit; and that the filing of Blossom's bill, the procuring the injunction, the fraudulent use made of it, and the discontinuance of the suit, were all parts of the conspiracy to defraud the complainants and deprive them of their rights; and that the injunction was the instrument by which this was effected. In this state of things, the complainants, as the parties in interest in Blossom's suit, claim that they have a right to the aid of that same court, by the abuse of whose process they are suffering, to relieve them. A claim, in my judgment, so obviously just — so well founded both in legal equity and natural justice — that it needs only to be asserted to be conceded.

The parties complain, not that the defendants have invaded the sovereignty by usurping a franchise, but that they, the complainants, have suffered a private injury, which has been perpetrated by the abuse of the process of a court of equity ; and they ask the same court to correct the wrong it has unintentionally committed, by restoring them to the condition in which it found them. And can it be that such a prayer as this is not to be heard, because, forsooth, the attorney-general does not choose to prosecute for the incidental evasion of the rights of the public ? I think not. By the discontinuance of Blossom’s suit, all tilings were theoretically restored to the state in which they were at the time of the filing of his bill; and it was the duty of the circuit court to have so restored them in fact, either by an order in that suit or a decree in this. Had the commissioners disregarded the injunction, and held an election, at which the directors adverse to Blossom and his associates had been elected, and who thereby possessed themselves of the franchise, and had Blossom prosecuted his bill to a final decree in his favor, would not the circuit court, in vindication of its violated process, have summarily disjilaced the contumacious intruders ? and would it have listened to a claim on their part, that being in possession of a corporate franchise, they could be ousted only by a quo warranto % I take it that our circuit courts, made by the constitution superior courts of record, and vested by that instrument with greater powers than were probably ever before, in a free government, delegated to any one tribunal — -the united powers of the English King’s Bench, common pleas, exchequer and chancery — will never prove themselves so impotent and complacent.^* And if the court would have thus summarily dealt with one set of intruders, wbo bad defied its mandate, bas it not tbe same power, and ought it not to exercise it, over tbe adverse set, who have got possession by means of a fraud upon tbe court itself, and by tbe abuse of its process ? To disclaim this power, or to withhold its exercise, I regard as a flagrant denial of justice.

It is very certain that bad Blossom’s bill been prosecuted, tbe court would not have hesitated in that suit to rectify tbe injury it bad been made tbe instrument of inflicting; these complainants would have bad tbe right of filing an original bill, such as this, in tbe nature of a cross-bill (Jones v. Jones, 3 Atk. 110; Hoff. Ch. Pr. 319, 349); and the court would not have beard an objection to its jurisdiction to correct its own involuntary wrong.. It is equally certain to my mind, that tbe mere discontinuance by Blossom of bis suit could not operate to deprive tbe court of such jurisdiction. Parties cannot be tolerated in playing this fast and loose game with tbe authority and jurisdiction of courts. Tbe jurisdiction which Blossom and bis confederates conferred upon tbe circuit court by tbe filing of tbe bill, and tbe abuse of the injunction, caunot, when they have profited by it, be withdrawn at their pleasure. It must, of necessity, abide in tbe court until it bas placed tbe injured parties in as good a situation as it found them.

Again: by tbe fraudulently sumg out and abuse of tbe injunction, tbe dignity of tbe court itself was attacked; and tbe inherent power of self-preservation gave it jurisdiction to vindicate itself and its suitors, by its own process. This is not a question, exclusively, of individual rights ; it involves, to some extent, tbe character and good faith of tbe court. And it is necessary, for tbe maintenance of that public confidence in tbe impartial and equal administration of justice so vitally essential to tbe usefulness of all judicial tribunals, especially in a republic, that such abuses of tbe power and process of tbe court as are here disclosed should find a remedy as speedy and as simple as tbe abuse. I am, therefore, of opinion that tbe circuit court had jurisdiction in this case; and that the decision of the court, sustaining the demurrer for want of it, was erroneous, and should be reversed.

It will be observed, that in coming to the conclusion at which I have arrived, I have had no reference to the statute of 1841; nor do I undertake to decide the general question, whether persons acting as directors of a private corporation, like this Plank Road Company, can be displaced at the suit of the corporators, without the intervention of the government. I have formed my opinion on the peculiar and extraordinary facts disclosed in this case. I have not searched for authorities, because I have not deemed them necessaiy; nor is it probable that any could be found in point; for it is believed that the nefarious transactions presented on this record are as much without precedent, as it is to be hoped they will be without imitation.

The third cause of demurrer is, that the Milwaukee and Janesville Plank Road Company should have been made a party.

I think the objection a good one. It is somewhat difficult to say at what precise time, or in what- particular stage of its proceedings, this association had, or would have, a legal existence as a corporation; probably not until its formal organization by the legal election of directors. The bill, however, shows that it is acting as a corporation and exists de facto, and that certain of the defendants claim to be its officers. This is enough to entitle it to be made a party in this suit. It has been contended with some plausibility, by the counsel of the complainants, that the corporation, being a mere formal party, is sufficiently before the court in the persons of the commissioners, and of the defendants who claim to be directors. He says: “ The corporators, the complainants, are in court; the claimants to be corporators by the subscriptions we seek to impeach, are in court; the commissioners, whom we claim to be the officers, if the corporation is in esse, are in court; the assumed directors are in court; what else is there to bring into court ? Nothing but a name / ” Precisely so. But that name is everything to the corporation; by it alone, it exists and is known; it cannot be described by any synonym or circumlocution; its name is itself; and eo nomine, it must appear. The decision of the circuit court, on this point, I think was correct. But as the complainants should have been allowed to amend, by making the corporation a party, the dismissal of the bill for this cause, was erroneous.

The last cause of demurrer is, “ that the complainants have no right to sue in behalf of themselves and the other stockholders.” The bill alleges that the stockholders, for whose benefit it is filed, are very numerous, and are unknown to the complainants ; and shows a case of common right in the complainants and all others whom they represent. A more appropriate case “ for some of á large number having a common right to maintain a suit in behalf of themselves and fellows, in aid of that common right,” cannot well occur. I think the bill is properly filed by the complainants, for themselves and the other stockholders.

On the whole case my opinion therefore is, that the decree of the circuit court, dismissing the bill, should be reversed, and that the record be remitted to the circuit court with directions to allow the complainants to amend by making the Milwaukee and Janesville Plank Road Company a party defendant. I am further of opinion that the process for bringing in the company should be served on the commissioners as the legitimate officers,' and that they should represent the company in the suit.

I add, in conclusion, that I approve of the denial of the injunction by the circuit court. In a case involving such important interests, both public and private, and where delay and interruption must be attended with such serious consequences, an injunction ought not to be allowed until the defendants have an opportunity of being beard. Kipp v. Ogden, 6 Johns. Ch. 160" court="None" date_filed="1822-06-24" href="https://app.midpage.ai/document/ogden-v-kip-5550518?utm_source=webapp" opinion_id="5550518">6 Johns. Ch. 160.

WhitoN and JaoesoN, JJ., concurred.

* The circuit courts shall have original jurisdiction in all matters, civil and criminal, within this state, not excepted in the constitution, and not hereinafter prohibited by law, and appellate jurisdiction from all inferior courts and tribunals, and a supervisory control over the same. They shall also have'the power to issue •writs of habeas corpus, mandamus, injunction, quo warranto, certiorari, and all other writs necessary to carry into effect their orders, judgments and decrees, and give them a general control over inferior courts and jurisdictions. Constitution of Wisconsin, art. 7, § 8.

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Dissenting Opinion

Lareabee, J.,

dissenting. I shall proceed to examine the grounds of demurrer in their order:

1. The bill is said to be multifarious in this, that it is exhibited against the defendants demurring, with Weds, Weeks, Kneeland and Ludington, for several distinct matters and causes, in many of which the demurrants are not interested; and that relief is sought by the bill on several distinct matters, to wit: to set aside the subscriptions of the demurrants; to set aside the subscriptions of Wells et al.; to declare the election of directors void, and to compel the commissioners to proceed and hold an election pursuant to the statute.

The doctrine is now well settled, and the authorities sustaining it are numerous, that where a bill is filed concerning things of distinct natures against several persons, it is demurrable ; but unconnected parties may join and be joined in a suit where there is one connected interest among them all, centering in the point in issue in the cause. 5 Madd. 138; Story’s Eq. 284; Mayor of York v. Pilkington, 1 Atk. 284; Weale v. Middlesex Water Works Co., 1 Jac. & W. 360; Brinkerhoff v. Brown, 6 Johns. Ch. 139" court="None" date_filed="1822-06-10" href="https://app.midpage.ai/document/brinkerhoff-v-brown-5550517?utm_source=webapp" opinion_id="5550517">6 Johns. Ch. 139.

Now, let us see how far' the cause at bar is open to this charge of multifariousness. The plaintiffs claim to be the only bona fide stockholders of the Milwaukee and Janesville Plank Road Company, having paid one dollar on each share by them subscribed, and charge that the subscriptions of the defendants were made in fraud of their rights, in fraud of the charter, and with the design of fraudulently obtaining control of the company; that their subscriptions are wholly void for many reasons, but mainly because no money has been paid upon them, as is required by the charter ; that Blossom subscribed one hundred thousand dollars, Sweet et al. fifty-five thousand dollars, and Weeks et al. one hundred and fifty thousand dollars ; and that Blossom, Sweet and their friends entered into a fraudulent combination; and that Weeks et al. made their fraudulent subscription in antagonism to that of Sweet and Blossom ; and that all the subscriptions were in fraud of the rights of the complainants, bona fide subscribers. The bill seeks to establish only one claim of right, which is that the complainants and their associates may be declared the only stockholders in the company, as being the only ones who had bona fide made their subscriptions in pursuance of the charter. It seeks to restore them to the position which they occupied prior to the alleged fraudulent acts of the defendants. The 'object of the bill is certainly a single one, although, in seeking to enforce it, it became necessary to join several as defendants who have separate interests. The defendants also claim to be stockholders in the company, though then subscriptions were made at different times, and for different objects. But I can but think that they have all a common interest, not in each distinct charge or allegation in the bill, but certainly in the point at issue in the cause.

There is no good reason why the rights of all the parties cannot be litigated in one cause, and whenever this is possible, a court of equity, which abhors a multiplicity of suits, will compel all who are interested in the point in issue to be made parties. If the complainants are in fact the only bona fide stockholders — have the exclusive right to the franchise, an assertion of that right by a competent tribunal will quiet all other claims. The defendants are all charged with a fraudulent intent in making their subscriptions, and in usurping the franchise of a corporation, though, as between themselves, their acts were in antagonism to each other.

The reason of the rule in relation to multifariousness was founded upon convenience. It would be a hardship to make each defendant answer the whole bill when different and distinct matters were charged, in which he was in no way interested. But certainly no sucb hardship could be urged in this cause. The only question in this connection is as to the fraud upon the complainants and upon the charter; this decided affirmatively, there would be no difficulty in reaching all the defendants by one decree.

As to whether the demurrer should be accompanied by an answer denying the combination specially charged, I have no doubt. The rule is well settled that such answer must be put in to authorize the defendants to demur. Mitf. Eq. Pl. 181; Landsdown v. Elderton, 8 Ves. 526. In Fellows v. Fellows, 4 Cow. 682" court="None" date_filed="1825-06-15" href="https://app.midpage.ai/document/fellows-v-fellows-6139714?utm_source=webapp" opinion_id="6139714">4 Cow. 682, although an answer was put in with the demurrer, denying combination, yet it was held that the demurrer admitted a knowledge as charged, on the part of all the defendants, of the particular facts upon which the charge of fraud was based. Indeed, the only distinction is this, that where there is only the general charge of combination, an answer need not be put in; but where there is a special charge, an answer denying the combination must always accompany the demurrer. Nor do I conceive the rale to have any the less stringency because several of the defendants chai’ged with the combination have joined in a general demurrer ; for if this were held, the rule in a majority of causes, would be entirely inoperative.

It may be as well to inquire here, before proceeding to the principal question in the cause, whether or not the corporation, at the time of the filing of this bill, was in existence.

The commissioners are appointed in the first place by the charter itself as mere ministerial officers, acting as the agents of the state in receiving subscriptions to the capital stock of a corporation created by the state, under the provisions and restrictions of the charter. The corporation, it is trae, was not created eo instanti, but its existence and right to the franchises conferred depended upon the contingency of a specified amount of stock being subscribed, and a specified amount of money paid thereon.

The commissioners were, in the first place, to open books of subscription, in which all persons might subscribe, and become stockholders upon the payment of one dollar on each share. This requirement of payment, was absolute and necessary to all the subscriptions made while the commissioners were acting in their ministerial character. They had no power to receive subscriptions without the payment, and they had no power to change, in the least, the requirements of the charter as to the time when or the amount which should be paid.

But, upon the fact being ascertained that one thousand shares were subscribed, and one dollar on each share actually paid in, the subscribers of such stock, and other persons who should associate with them, were, by the act, declared and created a body corporate and politic, by the name and style of the Milwaukee and Janesville Plank Road Company. I do not suppose it was the intention of the legislature to limit the amount to be received by the commissioners to one thousand shares. The books were opened at different and distinct points; and it would have been the right of any one person to make a bona fide subscription of any number of shares— say two thousand — immediately upon their being opened. There might have been one thousand shares subscribed by five hundred other persons ; and most, if not all, on the first day. This is not an improbable supposition, for frequently the whole capital stock of similar corporations has been taken in one day. In such case, could the commissioners have refused to issue certificates to each subscriber? Could they have refused to call a meeting of the subscribers, or could they at such meeting have discriminated or selected which holders of one thousand shares should vote and which should not ? No. Up to the time they ascertained that, at least one thousand shares — not exactly one thousand shares— •were subscribed, their powers were merely ministerial — having, in fact, no discretion or power beyond the plain, written requirements of tie charter under -which they were acting. But when it was ascertained that the requirement of the charter had been met — that one thousand shares had been subscribed — and one dollar on each share actually paid in, then, by the express words of the charter, they were clothed with all the powers of directors. The corporation was then in esse —the legislature saw fit to fully complete its organization, by providing officers for it — and hence, by the charter itself, appointed the commissioners as directors, until the company should elect their successors. It might have been better, it is true, that some more solemn act should have ushered this corporation into existence — that the commissioners should have certified to the governor of the state, and he, under the great seal, have declared the corporation in esse. But, as it is, the words of the charter are positive and clear that, as soon as one thousand shares are subscribed, then the subscribers are created a body corporate.

It was further contended, in argument, that the charter required only the subscriber’s to the first one thousand shares to pay one dollar on each share, and that after that amount was subscribed, the requirement was no longer in force. But this construction cannot be sustained. The legislature certainly did not intend making so marked a discrimination against the first subscribers. The object in requiring money to be paid, was plainly to prevent large subscriptions being made for the purpose of controlling the location of the road and the management of the affairs of the company. The charter is granted, not for the exclusive benefit of the stockholders, but for the benefit of the whole state. The road is to be located, not with referencé to the private interests of individuals, but with regard to the good of the whole community. There is often an issue between the interests of the public and those of individuals. Property is to be enhanced in value by the location of the termini; and this would, no doubt, be a sufficient inducement to large subscriptions, made for this mere purpose. Then, too, important rights are Tested by this charter — the right of taking private property — claimed to be justified, I suppose, in this charter of a territorial legislature, under the provision in our state constitution allowing private property to be taken for the public use — for the use of the state, or its public political agents. Much stress was laid, in argument, upon the sentence, “with such other pei-sons as shall associate with them (the subscribers of the one thousand shares) for that purpose,” as carrying the idea that others were joined with them, and were excluded from the restriction of payment. But I think the argument gains nothing from tins phrase. The subscribers of the one thousand shares, together with all persons who should subscribe with them, their successors and assigns, “for that purpose” — for i/ze purpose of enjoying the franchises of the corporation — were created a body corporate and politic. In other words, the act did not merely incorporate the subscribers to the one thousand shares, but they and all others who should associate with them for the purposes intended by the charter — for the construction of the road.

The bill is framed upon the theory that no corporation is as yet in esse (with a clause, however, in. the alternative), charging that its organization by the election of directors, in the proper manner and by the persons having the legal right under the charter to vote, has been prevented by the fraudulent acts of the defendants. But it follows, from the view just presented, that the corporation, being in esse, should have been made a party to the bill. Robinson v. Smith, 3 Paige Ch., 222" court="None" date_filed="1831-04-17" href="https://app.midpage.ai/document/robinson-v-smith-5547950?utm_source=webapp" opinion_id="5547950">3 Paige, 222; Verplanck v. M. Ins. Co., 2 Paige Ch., 438" court="None" date_filed="1831-06-21" href="https://app.midpage.ai/document/verplanck-v-mercantile-insurance-5547884?utm_source=webapp" opinion_id="5547884">2 Paige, 438, and cases there cited.

Upon these questions I concur with the majority of my brethren. The want of the company as a necessary party could have been easily remedied by amendment, and the cause proceeded; but the bill was dismissed, in the court below, upon the ground of jurisdiction. This is the most interesting question presented by the cause, involving not only the construetion of a somewhat loose and indefinite statute of our own state, but the examination of the broad ground of equity jurisdiction.

Proceeding upon the ground that the corporation is in esse, and that the defendants have fraudulently usurped its franchises, there is no doubt but at law the only remedy would be by quo wairanto. Courts of equity have, through a long train of decisions, estabiishéd their jurisdiction over corporations charged with a misapplication of funds — regarding them as trusts, also treating them as partnerships, and in very many cases upon the ground of fraud — commencing with the celebrated declaration of Lord Hardwicee, in The Charitable Corporation v. Sutton, 2 Atk. 400-406, and running through all the decisions down to our own day. Had a bill been filed against the commissioners, charging them with an abuse of their trust, there would have been no difficulty in the case ; but here we have a much more intricate bill, bringing before the court many parties having distinct interests, though growing out of the same subject-matter, and all interested in the point at issue in the cause. The bill, if amended by making the corporation a party, then seeks in effect to oust certain persons who are publicly acting as directors.

The statute of 1841, p. 36, is in the following words :

“.Sec. 1. That courts of equity shall have power to declare the charter of any corporation to be forfeited for any just cause, and shall possess and are hereby vested with the same power upon the subject of corporations that is possessed by courts of common-law jurisdiction.”

This statute gives distinctly to courts of equity the same power to declare the charter of a corporation forfeited, for any cause that would work a forfeiture if proceeded against at law. If the act had stopped here, there would be no difficulty in its construction; for the bill would have to be exhibited by the attorney-general. This construction is aided by the act of 1846, p. 85, giving the attorney-general the right to exhibit a bill against any corporation, and tbe court power to restrain it by injunction from assuming or exercising any franchise, liberty or privilege not allowed by the charter ; or to declare the charter forfeited for insolvency, misuser or non-user. So also in case of the usurpation of a franchise; a court of equity would,, have power to oust the usurpers upon a similar proceeding. But the act proceeds in the same connection to vest counts of equity “ with the same power upon the subject of corporations that is possessed by courts of common-law jurisdiction.” Now, at law, in the absence of a statute giving the power to a court of equity, in the case of the usurpation of an office or franchise, the only remedy would be by information by the attorney-general on behalf of the state.

The bill shows that certain of the defendants have assumed to act as directors of the corporation, that Ohandler is acting as secretary, and that they have fraudulently usurped its name and franchises. Here, then, are persons acting publicly as officers of a corporation, and they must be presumed to be rightfully in office. The bill is exhibited by individuals, seeking to oust them and substitute others in their stead. They claim an invasion of a mere private right, and do not call in the aid of the state to vindicate her own honor or to redress their grievance. Will the latter clause of the act of 1841 authorize this proceeding ? I think not. In the absence of a statute expressly giving the power, I see no distinction in the books between the remedy in the case of the usurpation of a franchise and the other cases, which demand the interference of the government or its law officer.

In the common case of a corporation usurping powers not granted, the remedy is always by information. Is there any distinction between the usurpation, by the corporation itself, of some franchise not granted, and the entire usurpation of the name and franchises of a corporation by unauthorized individuals ? Is the breach of the law and public policy any greater in one case than in the other ? Is not the fraud as flagrant in one as in the other ? I can see no distinction. In either, the injury to the private right is merged in the insult and injury to the state.

In the absence of the acts of 1841-6, in either case, the only TP.Tnedy would be by information by the law officer of the government; and with those acts I see only a right giyen to him to come into a court of equity, where the remedy can be more simple and speedy than at law. .

It is upon this ground that I thought the bill should be dismissed ; not that there was no equity in it, for if the allegations are true, there cannot be a cause more clearly requiring the salutary powers of a court of equity. It being admitted that the corporation is in esse, that certain persons are publicly exercising its offices, and using its corporate name, I think: the grave question is fairly presented of the right of private persons to proceed in a court of equity to oust the acting officers of a corporation. But the majority of the court have seen proper to waive all consideration of this question, and express no opinion upon it, sustaining the bill entirely upon the ground that the court acquired jurisdiction in this particular cause, because of the fraudulent use of its powers in a different cause by the defendant Blossom. That that suit ought to have been retained by the court for the purpose of vindicating its own integrity, and, if possible, righting the wrongs of these complainants, I have no doubt. But because of the fraud of Blossom in suing out his injunction, the court thereby became possessed of the power to entertain a distinct bill, filed by individuals, to oust those publicly acting as officers of a corporation, I do not believe. Perhaps I might have believed it, had there been any authority produced to sustain the position, or any argument had, either in the court below or in this court.

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Dissenting Opinion

Hubbell, J.,

dissenting. I cannot concur in either the reasoning .or conclusions of tire .decision.

1. Because tbe bill, as I understand it, contains no equity. It sets out with a statement, on tbe part of tbe complainants, of tbeir design, by a subscription of one thousand shares and tbe payment of one thousand dollars, to secure in tbeir own bands an election of directors, and tbe sole control of tbe corporation. It admits that they apprehended an intention by tbe defendants and others to make subscriptions to a greater amount, and that they were induced by a denial of such intention to become subscribers, and that they bebeved “that as soon as tbe reqmred number of one thousand shares of tbe said stock should be subscribed for, so that tbe said commissioners could proceed to organize tbe said company, tbe said books of subscription to tbe capital stock of tbe said company would be closed, and tbe said commissioners would at once proceed to organize tbe said company, to be composed of the said subscribers of such-one thousand shares, by calling an election of a board of directors of tbe said company, in pursuance of tbe provisions of tbe said act of incorporation.”

It further sets forth that they bad a “ resolution,” or express promise of tbe board of commissioners to that effect, and that, bad they known of certain further subscriptions to tbe stock, “they would not have become subscribers to tbe capital stock, or have paid tbe sum of one dollar on each share thereof to tbe said commissioners.”

These, then, were tbe objects and inducements — I should rather say this was, the bargain between tbe complainants'and a majority of tbe commissioners, for it is nothing less — on which tbeir subscriptions were made, and tbe equitable interference of this court is invoked to protect them. To say tbe least of tbe matter, it was a speculating transaction, in which tbe public bad no' concern. Tbe state grants corporate franchises for public purposes ; but when sqch franchises are converted, as in this instance, into mere instruments of private gain, courts of equity cannot lend tbeir aid to secure tbe objects of either party. Parties coming into court for such purposes, stand upon the old rule, “ in pari delictu, potior est conditio defendentis

The court should spurn the invitation to.become a party to a mere scramble for the control of a corporation which was created with a capital stock of three hundred thousand dollars, and which was attempted to be seized upon and appropriated by a few individuals by a subscription of one-tenth part of its capital stock and by the payment of one-three hundredth part of the money.

For these reasons, on the complainants’ own showing, I think the court below ought to have dismissed the bill.

2. Because the decision is not consistent with itself. If the corporation is organized and in existence, as the majority of the court hold it to be, then the defendants are its officers de facto, prosecuting the work, and exercising all the powers conferred by the charter, under color of law. The bill asks this court not only to take away their corporate property, but to oust them from their offices, and abrogate all their corporate rights.

I do not believe a court of chancery has inherent original power to make such a decree in any case; much more, on the complaint of individuals, without the aid of the state. This principle was settled, if anything ever can be settled, in the case of the Attorney General v. The Utica Insurance Company, 2 Johns. Ch. 386. It is sufficient to say that it was never before claimed or exercised in Wisconsin, however much the profligacy of corporate bodies may have provoked the restraining power of courts of chanceiy.

The statutes of Wisconsin, passed in 1841 and 1846, confer on this court, in my judgment, whatever right or power, and all the right or power it possesses over public grants of franchises, and over officers and bodies assuming to exercise corporate rights, under color of law. Without stopping to discuss the nature or extent of the powers conferred, I desire only to say here, thqt J. think, by the express terms of the statutes, this court can only exercise those powers when called upon by the attorney-general, in a proceeding on behalf of the state, or of parties concerned.

And when this court makes the use or abuse of its process by individuals, in another case, the pretext for the exercise of powers not inherent in itself or conferred by the statute, it overridés justice and abrogates law.

But again : if the corporation is not organized and in legal existence, as the bill maintains, then, on the case made by the. bill, there is no impediment to the legal action of the commissioners in the prosecution of their duties under the act.

The Blossom bill has long since been withdrawn, and all the parties to it are hable at law, for ah the frauds and perjuries which they are alleged to have committed to the complainants. Not only, then, have the complainants ample and perfect legal means of redress, but the commissioners are fully authorized to call an election of directors, by the legal stockholders, without the aid of this court, and all the powers and privileges of the franchise await their acceptance. Why, then, shah we assume a doubtful power for a questionable purpose, at the bidding of those whose hands, to say the least of it, are not clean ?

In conclusion, then, whether I assume the decision to be correct, contrary to the bill, or the bill to be correct, contrary to the decision, on neither horn of the dilemma can I hang a reason for reversing the decree of the court below. I think on principle and authority it ought to be affirmed, and this appeal dismissed.